Policy makers like to talk about the known unknowns and how these play into decision making, but we have to worry about the unknown unknowns.
In a lot of ways it’s just silly word play favored by consultants and shouldn’t be taken too seriously.
Still, there’s a reason we worry about the unknowns. The Wuhan virus was an unknown that came out of China and is now laying waste to the world.
It’s not an exaggeration to say the plague is of biblical proportions.
That’s a big unknown – a really big unknown.
We will get through it. Our parents got through World War II. That was six years of Hell. But we prevailed.
Now, while there’s little doubt that we find a vaccine for the Wuhan virus and may even develop a treatment in the weeks and months ahead, the timelines are what’s troubling.
Vaccines can take a year or more to develop, test and get into production. Until a vaccine is developed, we will probably be dealing the economic disruption for months and months.
So there’s little doubt we will be heading into a recession, which is defined as two quarters of negative growth.
There are economists, however, who think the risk is greater that we will be looking at full blown global depression – six months or more negative growth.
In Canada’s case, that is truly problematic. We are a trading nation. A global depression would be devastating to us.
More, the country headed into this mess already compromised. Massive decreases in investment as the result of misguided government policies has left the country ill prepared to handle a downturn.
Ottawa, to be sure, is promising $82 billion to help businesses and individuals weather this storm, but a great deal more is going to be needed – a lot more.
Unfortunately, Ottawa has been running massive deficits. This year’s deficit will likely exceed $100 billion. The country will likely have to spend another $100 billion before we’re through the outbreak and the global recession.
We need to restore investor confidence in Canada. We need to get our energy sector up and running on all eight cylinders. Oil and natural gas are two of our most important exports.
We need to think like businessmen. We can’t afford to gut our economies for sake of fighting a fake climate crisis. The eco-freaks are going to need to grow up and let the adults get on with rebuilding.
That’s what our parents did after defeating Germany and Japan. They built a great country and a great economy. We will do it again.